Buying your first car is a thrilling if overwhelming, experience. There’s something so satisfying about making that investment for the first time. However, if you’re not prepared, financing your ride can be terrifying.
We believe in providing an exceptional car-buying experience. This experience should be exciting, not stressful. So, here are a few things you should know about car loans before buying your first car.
Total Loan Amount
When you discuss financing, you may hear about your total amount. This may sound complicated, but it’s just the price you negotiated for the car, plus any taxes and fees, minus your down-payment.
Don’t be confused by the term; the total loan amount isn’t the amount you will pay over the length of your loan. Car loans typically include interest, which is the percentage you pay to the lender for the service.
In the auto industry, you may see this rate referred to as “APR.” The lower the APR, the less you will pay over the life of the loan.
If you’re mostly concerned about your monthly budget, pay attention to your monthly payment. This will be your total loan amount plus your total interest, divided by the number of months on your loan.
Loan lengths can vary widely. You can get short, one-year loans or up to 84-month plans. The longer the loan, the less you will pay each month. However, you will be paying longer. We will work with you to find a loan that makes sense for your budget.
Know Your Credit Score
You may be able to receive financing no matter what your score is. However, your score may affect what type of financing you receive. For example, low credit may mean a higher interest rate. On the other side, if you have great credit, you may qualify for special financing options.
Don’t get overwhelmed by the terms surrounding car loans. Our financing professionals are here to help you understand and enjoy your first car-buying experience.